Immigrants Tend to Live in High Welfare Benefit States

"...there is a 'striking and easily observable' clustering of immigrants in high-benefit
states."

In Immigration and Welfare Magnets
(NBER Working Paper No. 6813)
, NBER Research Associate George Borjas concludes that "the generous welfare
benefits offered by some states have magnetic effects and alter the geographic
sorting of immigrants in the United States." He finds that there is a "striking and
easily observable" clustering of immigrants in high-benefit states, such as
California. This is especially true for immigrants receiving welfare as opposed to
those who are not. Natives do not cluster in the same way, perhaps because they
find it expensive or costly in other ways to move from one state to another.
Immigrants have already decided to make the costly move to the United States, and
then must only decide which state is most advantageous to them. The extra cost of
reaching that state may be small.

To reach his conclusion, Borjas uses data from the 1980 and 1990
censuses, looking at where immigrant households (those whose heads are resident
aliens or naturalized citizens born outside the United States) have settled and
making comparisons with native households (those with heads born in the United
States). In classifying households, Borjas determines if a household received Aid to
Families with Dependent Children (AFDC), Supplemental Security Income, and
general assistance in the year prior to the census. The census data does not include
information on Medicaid and Food Stamps. His calculations take account of the
general trends in welfare.

California, Borjas notes, has become relatively more generous in its welfare
provisions. In 1970, California benefits were at the median, with as many states
giving more as those giving less. By 1990, California's AFDC benefit package was
almost the most generous in the nation. It was 20 percent larger than that provided
by New York; 89 percent larger than the one in Illinois, and almost 280 percent
greater than that offered by Texas. The increasing relative generosity of California's
welfare system appears to have had an impact.

In 1990, California was home to 9.6 percent of U.S. natives who did not
receive welfare and 11.5 percent of U.S. natives who did. It was also home to
27.6 percent of the nation's immigrant households that did not receive welfare and
37.6 percent of immigrant households that did.

If only those immigrant households whose head has arrived in the United
States five years prior to the census are included, the clustering becomes even
clearer. Some 45.4 percent of recent immigrants receiving welfare live in California,
as compared to only 28.9 percent of those recent immigrants who do not receive
welfare. Much of this clustering is because less-educated immigrants are more
likely to live in California than less-educated natives. This is true even within groups
of immigrants from a specific nation.

The same clustering is shown in the numbers for recent female-headed
immigrant households with children. Borjas also determines that the clustering in
California holds if immigrants from countries sending large numbers of refugees to
the United States are excluded and if immigrants of Mexican origin are excluded. So
the clustering in California can't be said to be entirely the result of California being
adjacent to Mexico, or merely a favorite location for refugees. Further, his analysis
indicates that clustering is not attributable to ethnic enclaves in California that often
help new immigrants get settled.

-- David R. Francis

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